Cláudio Oliveira, the self-proclaimed “Bitcoin King” of Brazil, was arrested by Brazilian police yesterday. Oliveria was the president of the Bitcoin Banco Group, a popular Brazilian trading platform for cryptocurrencies.
Oliveira is accused of embezzling as much as 1.5 billion Brazilian real, or about $295 million or €249 million. The Brazilian police announced this via a live stream on July 5:
The Bitcoin Banco Group was the subject of a three-year criminal investigation dubbed “Operation Daemon.” The trading platform, as we often see in this type of scam, promised exorbitant returns to customers. In May 2019, the first customers rang the bell when their requests to withdraw their funds from the platform were blocked.
Subsequently, the Bitcoin Banco Group claimed that the platform had been hacked and that as many as 7,000 bitcoins (BTC) had been stolen. However, the company was unable to provide proof of this at the time. In September 2019, the platform was shut down when hundreds of complaints poured in. Thousands of customers have reportedly been duped.
The company then applied for a kind of judicial recovery, an arrangement with the Brazilian authorities to put its finances in order and pay out creditors. However, it turned out that the company just happily continued on the same path. The Bitcoin Banco Group even advertised to attract new customers.
The investigation shows that the Bitcoin King has funneled huge amounts of money from customers. It also appears that Oliveria may have been active in the US and Europe with such scams. These types of practices are less common in the crypto industry than is often thought, but still give the industry a bad name. Recently such a story came out from South Africa, these owners may have stolen ten times more crypto.